Under-enrollment doesn’t “just happen”

July 12, 2013

As a chief admissions/enrollment officer for 22 years, my fingernails would become predictably short during April. Enrollment projection models, built on the average of the previous three years experience, did little to cure me of sleepless nights heading up to May 1. With the exception of the first half of the 1990s and the final two years (2008-09), my tenure as a dean and then vice president for enrollment was admittedly (and fortunately) in times of demographic and economic growth.

Nevertheless, concerns about missing the numbers of new students as well as net revenue targets were real. Being over target was not desirable (though tolerable, especially when counting up net revenue gains), but coming in short was something to be avoided at all costs. In fact, during the time I oversaw enrollment at two different institutions, I undershot only once by (4%) and that was in a year when we attempted to shave 15 percentage points off of our acceptance rate. I should have known better; that under-enrollment didn’t “just happen.” It occurred because our success in the two previous years resulted in a major increase in applications that in turn gave us a false sense of security – that we could move the needle on academic quality without financial consequence. It just doesn’t work that way.

Perhaps. But the key, I believe, is in what Loyola’s president, Rev. Kevin Wildes, told the IHE reporter. He said that the university tried to lower its discount rate and increase net revenue per student. “My intuition is that [we] did a much more draconian drop in financial aid than we should have. And I think the market reacted.” Indeed it did!

At St. Mary’s, while an earlier IHE story said the college was looking into the reasons for their drop, officials did say that they experienced a 14% increase in applications. When that happens, colleges are tempted to lower their acceptance rate significantly (US News likes that!), but that move often results in a lower yield. I don’t know if that is what happened at St. Mary’s, but that certainly was my experience in the year I presided over a smaller entering class.

Indeed, the price tag of a four-year degree –public or private – has grown significantly while the proportion of families who are able to afford most or all of the charges has dropped. This puts enormous pressures on institutions. But enrollment declines in one year of the magnitude experienced by Loyola, New Orleans and St. Mary’s, Maryland are not simply the result of market trends. More likely, these declines resulted from a fundamental misunderstanding of how the market would react to significant changes in admission (acceptance rates) and financial aid (discount rates) policy changes.

There is no question that colleges and universities must find creative ways to reduce their costs and to provide new alternatives to help families finance educational expenses. The status quo will not work for too much longer. But to avoid significant drops in enrollment and revenues from one year to the next, institutions must carefully assess, through modeling and consultation with colleagues, the projected impact of policy changes before implementation. We simply cannot afford to proceed any other way.

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Robert J. Massa was dean of enrollment at Johns Hopkins University and vice president for enrollment at Dickinson College. He currently serves as vice president for communications at Lafayette College.